DETROIT -- Carlos Ghosn, CEO of the Renault-Nissan Alliance, warned today that global paradigm shifts in energy and demographics threaten to disrupt the auto industry.
Exploding populations in developing countries are spurring unprecedented demand for cars and the fossil fuels powering then, he said in a keynote address at the Automotive News World Congress. But instead of preparing, carmakers are passively reacting, he said.
By 2050, there may be 2.5 billion vehicles on earth, compared with fewer than 1 billion now, he said. China and India are expected to account for half the growth in energy demand through 2030.
"Our world is experiencing several paradigm shifts," Ghosn said. "These trends have the potential to severely disrupt our industry and our planet."
'Are we naively reacting?'
"Demand for cars will be strong," Ghosn said. "But are we naively reacting to demographic shifts instead of proactively reshaping our industry?"
The Renault-Nissan Alliance, he said, is being proactive on several fronts:
- Cultivating a multi-cultural, international corporate culture;
- Moving aggressively into zero-emissions vehicles; and
- Pursuing strategic partnerships to gain scale and combat fixed costs.
Successful companies will tap talent from a global pool, he said.
"In 1999, Nissan was homogeneous and closed-minded. Nearly all of the senior managers were from a single country, and most had graduated from the same few universities," Ghosn said. "Today, nearly half of Nissan's senior executive team was born outside Nissan's home country -- a greater percentage than probably any other big company in Japan and in our industry."
Away from fossil fuels
To address changing energy demand, Renault-Nissan is also trying to take the lead in the emerging market for electric cars that are less dependent on fossil fuels.
In 2007, the alliance decided to invest $5 billion to develop battery-powered cars. Nissan delivered its first Leaf electric vehicle in 2010, and last year, it sold 21,000 Leafs worldwide.
"Across the Alliance, we believe we can sell a cumulative 1.5 million electric vehicles by 2016," Ghosn said. "We will spare the planet millions of tons of greenhouse gases, boosted by the increasing efficiency of the world's energy grids."
The final paradigm shift automakers confront is high fixed costs. Rival automakers must increasingly pool their resources to share investment expenses, he said. The catch is that many partnerships, such as the ill-fated Daimler-Chrysler tie-up, don't make it.
"The 12-year-old Renault-Nissan Alliance took a different approach, one that preserves brand integrity and corporate cultures," he said. "Amidst a graveyard of failed combinations in the past 15 years, we have built the longest surviving major cross-cultural partnership in our industry."
His company has built on that bond with other ties-ups with Dongfeng in China, Avtovaz in Russia and Daimler in Western Europe and North America. On Sunday, Nissan said that in 2014 it would start making gasoline engines in Tennessee for Daimler and the alliance.
Ghosn said the Renault-Nissan Alliance is well positioned for the challenges.
"I am optimistic about our industry's future. More than 50 million people globally earn their living in the auto industry," he said. "We have a responsibility to ensure this industry can grow, prosper and meet the expectations of society for safer, cleaner and more affordable mobility."